Governor Granholm's 2006 spending plan would have doctors paying a tax to help the state get more federal money for Medicaid patients.
Also, spending on public education from the school aid fund would grow to nearly $13 billion. Schools would receive $175 more per pupil for elementary, middle school and junior high students and $225 more for high school students.
Details on how Granholm would fill a $382 million gap in the current budget year were presented to state lawmakers Thursday.
Granholm's office says the $8.9 billion general fund would be balanced by eliminating $390 million in tax exemptions.
The plan includes higher fees for liquor licensees.